The estimated business generated from artificial intelligence in 2018 is expected to be around $1.2 trillion. As expected, the figure will triple by 2022. Given these predictions, it’s not surprising that some bold businesses are taking notice. Among them, Microsoft is among one of the most assertive, given the company’s recent acquisitions. Over the last several months, several AI and bot companies acquired by Microsoft have made the news. The latest of these companies acquired by Microsoft is XOXCO, a conversational AI, and bot development startup. It, therefore, is worth examining Microsoft’s strategy in this exciting new business arena.

Microsoft CEO, Satya Nadella

A Look Back at Microsoft’s Recent Acquisitions—On AI and Bot Strategy

Microsoft’s recent acquisitions of AI and bot companies might suggest the company has had great success in this area. However, the road has been a bit rocky, to say the least. In 2016, Microsoft introduced its pilot Twitter bot named Tay. After Tay had a number of social fails, Microsoft shifted gears. Later bots had much better success with new policies adopting an ethical stance and development transparency. Companies acquired by Microsoft further advanced success to develop an interest in this area.

While Microsoft’s recent acquisitions include XOXCO, others have been announced in the past year or so as well.Recent companies acquired by Microsoft include Semantic Machine, Bonsai, and Lobe. Semantic Machine is a conversational AI startup company based in California.

Bonsai creates AI developer kits. Lobe offers no-code, deep-learning AI services. Given Microsoft’s these recent acquisitions, it seems apparent the company has a clear vision of what it is trying to do.

Corporate Vice President of Microsoft AI and Research Division, Lili Cheng

Microsoft’s Recent Acquisitions to Expand Services

The companies acquired by Microsoft allow Microsoft to be much bolder in its offerings of intelligence application program interfaces (APIs). As part of Microsoft Cognitive Services, Microsoft seeks to provide companies with customizable AI and bot services.

Microsoft’s recent acquisitions facilitated the company to offer an array of business tools. These include several open source tools that can be used as part of Microsoft’s Azure cloud computing platform.

Regarding these specific open source tools, Microsoft provides emotion APIs that allow companies to detect and interpret facial expressions. In addition, computer vision tools enable the extraction, categorization, and processing of visual data. Also, speaker recognition tools may be included that verifies and authenticates voices. Finally, language understanding intelligence services offer the ability to develop conversational apps. Microsoft has augmented its Cognitive Services with these tools gained by companies acquired by Microsoft.

Corporate Vice President of Microsoft Healthcare, Peter Lee

A New Strategy Using Companies Acquired by Microsoft

Microsoft’s recent acquisitions herald a new strategic approach in its commitment to its role in AI services in the future. Currently, only four percent of companies utilize AI, and about 21 percent have pilot AI programs. But by 2020, over 85 percent of companies are expected to have these types of pilot programs. Microsoft wants to be there to aid these companies in their pursuits. This not only involves providing them with the cognitive tools to do so. It also includes helping business to ethically use AI in its practices. It remains a bold part of Microsoft’s commitment to advance AI and machine learning in business.

Microsoft’s new strategy in this area is quite credible. With Microsoft’s recent acquisitions, the company has found a way to monetize these services for customers well into the future. Rather than providing the entire AI or bot package to businesses, Microsoft provides the tools instead. This enables companies to customize their AI services as needed. Moreover, the use of these tools requires ongoing monetary subscriptions based on the volume of use. This approach fits very nicely with Microsoft’s cloud computing services strategy as well.

Positioning Itself Well for the Future

An ancient Chinese proverb helps put things in perspective for Microsoft’s new AI and bot strategies. It states, “Give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Microsoft not only wants to teach companies how to utilize AI in their business. It also wants to rent them the tools to do so along the way. Once familiar with these tools and services, business clients are likely to stick around. If Microsoft has its way, it will likely be for a lifetime as well.